Question

Interest on Calls-in-Advance).
Raman Ltd. issued 20,000 shares of Rs. 10 each at par payable as follows:
1) Rs. 2.50 on application payable on 1st May, 2009;
2) Rs. 2.50 on allotment payable on 1st July, 2009;
3) Rs. 2 on first call payable on 1st October , 2009; and
4) Balance on second call payable on 1st February, 2010.
All these shares were subscribed and amounts received.
Shareholder ‘A’ who had been allotted 200 shares paid the amount of the first and second calls with allotment. Another shareholder ‘B’ holding 100 shares did not pay the final call till the date of the Balance Sheet.
According to the Articles of Association of the company, interest @ 4% p.a. is payable by the company on any Calls-in-Advance. The interest was paid by the company to the shareholder on 1st February, 2010. Pass necessary Journal entries (including interest) in the books of the Company

Answer 1

Answer:

Rs250is was the most important